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Ratio calculations for Jackson Electronics

Jackson Electronics is a retailer of electronic products. Using the financial data provided, complete the financial ratio calculations for 2007.

(see attached files)

Jackson Electronics is a retailer of electronic products. Using the financial data provided, complete the financial ratio calculations for 2007.

Financial Ratios 2005 2006 2007 Averages 2007
Current ratio 1.71X 1.65X 1.70X
Quick ratio .92X .89X .95X
Average collection period 60 days 60 days 65 days
Inventory turnover 4.20X 3.90X 4.50X
Fixed asset turnover 3.20X 3.33X 3.00X
Total asset turnover 1.40X 1.35X 1.37X
Debt ratio 59.20% 61% 60%
Times interest earned 4.20X 3.70X 4.75X
Gross profit margin 25% 23% 22.50%
Operating profit margin 12.50% 12.70% 12.50%
Net profit margin 6.10% 6% 6.50%
Return on total assets 8.54% 8.10% 8.91%
Return on equity 20.93% 20.74% 22.28%

Income Statement
Sales $1,500,000.00
COGS $1,200,000.00
Gross profit $300,000.00
Operating expenses $100,000.00
Operating profit $200,000.00
Interest expense $72,000.00
Earnings before tax $128,000.00
Income tax (0.4) $51,200.00
Net income $76,800.00

Balance Sheet
Cash $125,000.00
Accounts receivable $275,000.00
Inventory $325,000.00
Current assets $725,000.00
Fixed assets $420,000.00
Total assets $1,145,000.00

Accounts payable $150,000.00
Notes payable $225,000.00
Accrued liabilites $100,000.00
Current liabilites $475,000.00
Long-term debt $400,000.00
Total liabilities $875,000.00
Equity $270,000.00
Total liabilites & equity $1,145,000.00

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Jackson Electronics is a retailer of electronic products. Using the financial data provided, complete the financial ratio calculations for 2007.

Financial Ratios 2005 2006 2007 Averages 2007
Current ratio 1.71X 1.65X 1.53 1.70X Current ...

Solution Summary

The solution explains how to calculate various ratios for Jackson Electronics

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